Large Gifts Drive Higher Education Philanthropy to New Highs

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Every Institution’s Largest Potential Gifts Are Larger than Before

Marts & Lundy’s mid-year report on principal gifts of $10M+ to Higher Education shows a continuation of a “steady state” into a fourth year, bringing top-of-mind the ever increasing significance of these larger gifts in the growth in giving to education.

What’s interesting is that today’s big gifts support the conventional wisdom at this dizzying level of philanthropy in support of Higher Education – $40 Billion annually according to The Chronicle of Philanthropy. With $10M+ gifts representing 14 percent of 2015 aggregated giving to Higher Ed, this statistic mirrors the top gift of a traditional giving pyramid. And while today’s pyramid is “steeper,” aggregate giving of $40 Billion to Higher Ed requires these larger gifts in order to increase institutional giving totals.

The giving pyramid has always reflected the distribution of wealth in the United States, and philanthropic behavior is showing what all of us know — that the wealthy are wealthier than they were 25 and more years ago. All institutions must learn to ask for their largest gifts.

Steadily rising giving totals with a corresponding decline in participation since 1987 reinforce the importance of concentrating on larger gifts. For all institutions, it means adjusting to the realities of the accumulation of larger individual and family fortunes, even at the expense of chasing broad-based giving. It is likely true that only the best-resourced advancement organizations can afford to do both, in terms of primary strategies. To ignore this distribution of wealth reality without a focused and full-time dedicated principal gifts team is to lower an institution’s philanthropic capacity significantly. Those under-resourced institutions wishing to “jump-start” their philanthropy are better off seeking principal gifts, and resisting the conventional wisdom to expand their annual giving base.

The Philanthropy Outlook, researched and written by the Lilly School and presented by Marts & Lundy, forecasts continued growth in this sector in the year ahead. Even in the event of a cyclical pause, the wealth created over successive bull markets since the 1980’s will likely be with individuals and families for generations. Potential large donors may become more cautious, but their capacity is exponentially greater than a generation ago. Barring significant political or social upheaval, the philanthropic landscape has likely been changed for some time to come.

I invite you to download the Mid-Year Report: $10M+ Gifts to Higher Education and welcome your thoughts. Simply write us at comments@martsandlundy.com.